Category: Trades

It’s been a couple of weeks since I talked about making money from Facebook. As the company lurches from one data breach to another, and one privacy row to the next the stock continues to offer some excellent trading opportunities. Wednesday provided some good examples:

As we can see, this was a three biter. The first entry was a no-brainer — a textbook setup with the added advantage of a nice triangle pattern to add weight to it, good volume and momentum, and a realistic target with great profit potential. The target was easiy hit within fifteen minutes, netting $850.

I would have left it there and been happy with the result, but the price kept going and showed every sign of having more to give. So when a second entry came along, it was well worth taking. With my finger hovering over the exit button ready to give back no more than $50 of that first profit if I was wrong, I watced it make me another $500 in ten minutes.

After bumping up against the second target price for a while, it made another break for it, and I was happy to go along for the ride, taking profit at the obvious target.

Finally momentum faded, the price started going sideways, and more importantly, it was lunchtime, so that was me done for the day. $1,780 banked. A nice morning’s work.

FB wasn’t the only tech stock to fill the coffers. AAPL had also given a nice trade before FB kicked off:

As is so often the case with Apple, the trade was fast and furious. $770 profit (exiting at the target) in about fifteen minutes. Just as well, as it left the account funds available for the FB trades!

You have to love it when a setup combines with a pattern like a triangle. Extra confirmation is always a bonus and gives you more confidence to go into the trade. Naturally we always want more than one signal anyway (usuaully the chart setup and the tape), but seeing extra confirmation on the chart is nice to have.

In this case it meant being able to take the entry a little earlier than normal, adding a few cents to the bottom line. A few cents might not sound like much, but when your finger is hovering over the exit button ready to hit it if the thing goes just a few cents against you, it can be the difference between the trade working out or not.

Obviously this one did work out, making $600 in about fifteen minutes. The exit was when momentum evaporated and the price started heading south.

It’s been a little while since I posted a trade on Apple, so here’s one from Monday’s session:

It’s standard stuff from this core stock — a textbook entry then an exit when the momentum dried up and the price failed to reach the initial target. The trade lasted about six minutes, so that’s more than $100/minute profit if you like counting that stat. It’s a useless statistic of course, because it doesn’t count the pre-market homework and the waiting around for a trade to present itself. Even so, for a total of about three hour’s ‘work’, $800 isn’t bad, and that was just one of the day’s trades.

It’s been a while since I posted a Boeing trade, but the beleaguered plane-maker is still providing boundless of opportunities to makes bundles of cash. Here’s a quickie from Friday’s session:

With such a high-priced stock, I’m trading smaller than usual size. Even so, the range of BA means that $1,265 profit from a twenty minute trade is quite doable.

There’s nothing hard about these trades; they are bog-standard setups of the kind I’ve been trading for decades. Someone asked me the other day if my trading strategy only works in a trending market, which misses the point entirely. These are momemtum setups, and the point is that in a vast universe of stocks, there are always momentum trades to be had. What the overall market is doing is largely irrelevant. It could be the flatest or choppiest day you like, there will always be at least a handful of stocks that move like that BA chart above. Which is why these setups stand the test of time; they are not a short-term play that require specific market conditions.

Strictly speaking this was an early entry. Howver, it was so clearly signalled it was worth the relatively tiny risk. Especially given the potential upside, and indeed this was another twenty minute trade that produced a four-figure profit.

One more, a quick look at core stock MU:

Far less impressive to look at than the others, but remember trades like this are the bread and butter of the pro trader.

Just time to post one trade today, which actually turned out to be two. The first one failed miserably, as we can see from the chart.

The golden rule, as we know. is to never let a winning trade turn into a losing one. So when after entering, momentum evaporated, it was time to get straight back out with just a few cents. Taking $100 covers the commisision and leaves enough profit for a nice lunch somewhere, which is better than losing money on a trade that didn’t work out. Stop loss orders are for emergencies only — we never want to actually let them get hit!

That wasn’t the end of the story though. There was no reason not to keep watching TMUS (and plenty of reasons to think it had further to fall), so when momentum picked up and it headed south again, it was worth jumping on board. With a nice target easily hit, and a more decent chunk of the profit pie banked, it was time to get out.

For those less lazy than myself, there were further opportunities to make some money from the continuing fall in price later on.

Viacom was on my list but spent most of the morning faffing around on (relatively) low volume doing nothing very interesting at all. Then, just as I was about to call it a day, this happened:

Volume and momentum picked up, and we were off to the races. The downside to this late trade is that I had to work past midday, which is rarely a winning situation. The upside was more than a thousand dollars profit on the trade. So there is that.

There were smaller trades to be had as well. Here’s one such example

Another relatively late trade for me. And one that broke the rules. What is it they say about rules? Something about having to know them so you know when to break them. Strictly speaking, although this was a late trade in terms of the hour, it was an early entry. But the support and the triangle and the price action all conspired to suggest that there was little to be risked by getting in early on this one. Just as well too, because waiting for the ‘correct’ entry would have made this already modest win even more modest.

As I mentioned in my post Want To Make $200k A Year?, most trading profits come from bread and butter trades rather than stellar winners. Stacking up consistent regular profits can lead to a decent full time income. Tuesday’s trades were all of the bread and butter variety. Let’s start with DERM:

This stock is a bit lower priced than I tend to look at usually, but as we’ll see there were a few of these cheaper ones making moves. The entry was a regular setup (and a lovely ascending triangle too, if you like those), and the exit was when momentum dropped off a cliff.

Next up, here’s another cheapie — MIK:

This was even more bog standard. $500 profit for a ten minute trade is certainly not to be sneezed at, but neither is it going to set the world alight.

Finally here’s a old friend core stock, MU:

Standard setup, and if I’m honest, I was a bit late on the exit here. Could have squeezed a bit more out of it had I got out at the obvious target, but there we go, sometimes you’re looking at the wrong thing at the wrong time.

My point though, is not about my shoddy exits. It’s about the fact that these three trades, bread and butter stuff, as simple as it gets, add up to a profit of $1,420 on the day. Well, on the morning, because I was all done by lunchtime, naturally.

If you traded for four mornings a week, 48 weeks a year, and made consisent profits like that, you’d be making about $272k a year. Not taking into account the bigger winners that inevitably come along as well.

I don’t post this to boast or brag, but because I know a lot of people who read this blog are struggling with the discipline necessary to suceed at trading. I was there too, once. It can be hard to keep going, especially when “star traders” are posting four-figure profit trades day after day (yes, I’m guilty of posting those too, sometimes). But you don’t need to make those kind of trades to make good money. Consistency is the key. Take a little out of the market day after day, and it all adds up. Hopefully this post provides a little motivation.

It’s all fairly standard fare. A regular entry, quick drop with a price target in mind, and when it wobbled a bit around that target, I took half off. Why not all? Because my target was quite conservative given how the price had been falling from the open, and because there was no conviction in its efforts to rise again.

That meant I had half my position left to take some profit from the second part of the move. That one did end with a positive upswing, so it was time to get out, with a total profit on the trade of $820 in about fifteen minutes or so.

It’s all about the momentum with these setups — it has to be there to confirm an entry. As long as it’s still there, I stay in. The chart only ever tells half the story, the rest plays out on the tape. People often forget that.

It’s been a busy week. BA had some tradeable moves again yesterday, but the huge swings from the first two days of that news cycle seem to be behind us. With the USA grounding the fleet as well, the worst news for Boeing is probably now behind us (unless they find a fault that affects older models of the 737 as well, I guess).

So just one quick trade to post today, because it was a four-figure win of the type I said don’t come along every day. Here’s DG:

The setup wasn’t quite as clean as I like, so I was very vigilent on the exit button. In the event though, momentum was there and the trade worked out exactly as the strategy suggests. Exited after hitting the target, seeing momentum dry up, and the price starting to rise.

Just over a thousand dollars. profit in ten minutes or so on this stock. So it was one of those dull bread and butter trades that turned out to be more…brioche? I’ll stop with the metaphors!